British Airways posted better-than-expected quarterly profit growth and raised its full-year sales forecast as higher ticket prices allowed the airline to shrug off higher fuel costs and industrial action.

Europe’s third-largest carrier said operating profit reached £261 million, up 6.5 per cent from the £245 million reported a year ago, thanks to higher passenger numbers, fuel surcharges on tickets and a recovery in demand for first- and business-class travel. The profit beat analysts' expectations, which were centred at around £236 million.

For its full-year, BA said it expected revenues to rise between 6 and 7 percent as fuel surcharges and higher passenger numbers helped offset oil prices. It had previously forecast sales to rise between 5.5 per cent and 6.5 per cent.

BA's sales rose 8.2 per cent in the quarter to £2.21 billion.

These were the first quarterly figures since Willie Walsh became BA chief executive. He called the figures "a reasonable set of results". But he said they could have been better were it not for August's labour dispute with caterers Gate Gourmet at its Heathrow hub.

BA revealed today that the two-day strike, which grounded 700 flights, cost the company between £35 million and £45 million. This did not have a material impact on the results due to flight disruptions in the same period a year ago, the firm said.

The airline added that passenger traffic bounced back last month, increasing by 6.4 per cent.

"The results could have been much better were it not for the unlawful industrial dispute in August," Mr Walsh told BBC Radio 4's Today programme. "We can do better and we will do better. The traffic figures we released today for October show that passengers want to fly with British Airways."

The airline left unchanged its forecast for an annual fuel bill of £1.67 billion. BA's fuel costs were up 51.3 per cent in its second quarter, having risen 37.6 per cent in the previous three months, as disruptions to supply and a shortage of refining capacity drove oil prices close to record levels.

In September, BA raised its fuel surcharge for passengers on long-haul flights for the fifth time in little more than a year. It adds a £30 levy on one-way long-haul tickets and an £8 surcharge on shorter flights.

BA has hedged 81 per cent of its fuel bill at $41 per barrel by purchasing oil futures contracts, Mr Walsh said. Crude-oil for November delivery was trading at around $63 a barrel in New York.

BA's quarterly pre-tax profits were £241 million, down from £293 million in the same periof last year, after new accounting rules changed the way it booked the sale of a stake in Australia's Qantas Airways.

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